TikTok Finalizes Landmark US Ownership Transfer Deal After Years of Political Uncertainty
The popular video-sharing platform TikTok, which boasts approximately 200 million users in the United States, has officially commenced the process to transfer control of its American operations. This move comes in compliance with a deal signed with the Trump administration, marking a significant milestone in a saga that has spanned several years and threatened the app's existence in the US market.
Joint Venture Details and New Ownership Structure
According to a Bloomberg report, TikTok and its Chinese parent company ByteDance finalized a long-awaited joint venture on January 22. This agreement transfers parts of TikTok's US business to new owners, including US software giant Oracle Corporation, private equity firm Silver Lake Management LLC, and Abu Dhabi-based investment company MGX.
The ownership breakdown reveals that new investors will hold 50% of the newly formed TikTok US entity. Existing ByteDance investors will control 30.1%, while the parent company ByteDance itself will retain a 19.9% stake. Despite this shift, ByteDance is expected to maintain control over TikTok US's advertising division and the rapidly expanding e-commerce segment known as TikTok Shop.
Algorithm Licensing and Data Security Measures
Under the terms of the deal, ByteDance will lease a copy of its content algorithm to the US entity. This arrangement will allow the American unit to retrain the new algorithm using US user data, ensuring continuity in the app's functionality while addressing data privacy concerns.
Reuters has reported that the joint venture, officially named TikTok USDS Joint Venture LLC, will implement robust data privacy and cybersecurity measures to secure US user data, applications, and algorithms. These measures are detailed in internal company documents and aim to alleviate longstanding fears about Chinese government access to American user information.
Leadership Changes and Operational Continuity
TikTok CEO Shou Chew will secure a seat on TikTok US's board of directors and will continue to oversee the app's global operations. Meanwhile, Chew's second-in-command, Adam Presser, will assume the role of CEO for the US division, ensuring a smooth transition and consistent leadership.
Political Backdrop and Trump's Role
Former President Donald Trump celebrated the successful conclusion of the deal on January 23, taking to Truth Social to express his satisfaction. "I am so happy to have helped in saving TikTok!" he wrote, acknowledging Chinese President Xi Jinping's cooperation in approving the agreement. Trump credited TikTok with helping him secure the youth vote during the 2024 US Presidential elections and thanked Vice President J.D. Vance and other administration officials for their efforts in finalizing the deal.
Timeline of the TikTok Deal in the United States
- 2020: During his first term, President Donald Trump threatened to ban TikTok over data security concerns, issuing executive orders to ban transactions with the app and demanding ByteDance divest its US interests.
- 2024: Congress passed legislation to ban the app unless ByteDance sold it to a US company. President Joe Biden signed the 'Protecting Americans From Foreign Adversary Controlled Applications Act,' mandating separation from ByteDance to avoid a ban.
- 2025: After returning to the White House, Trump delayed enforcement of the law while negotiating a transfer of control to American ownership, ultimately approving a deal with a January 23 deadline.
- 2026: TikTok and ByteDance closed the joint venture, transferring parts of the US business to non-Chinese owners, culminating years of regulatory and political challenges.
This agreement not only resolves immediate regulatory pressures but also sets a precedent for how global tech companies navigate geopolitical tensions and data sovereignty issues in key markets like the United States.
